According to the Global Corporate Lettings Review released by Knight Frank, as companies look to expand their global operations into emerging market and strengthen their foothold in existing locations, demand for corporate relocation services has risen.
The 2014 Global Corporate Lettings Review looks in detail at the demand for prime residential accommodation by multinational corporate firms, analysing the different market trends and lettings practices in key cities around the world with a particular focus on markets in the UK, US, Hong Kong and Singapore.
Key findings of the Global Corporate Lettings Review:
• Prime city rents in Nairobi saw the strongest rise in 2013.
• The UK, the US and Hong Kong saw the number of employment visas rise by 12% in 2013.
• As the number of individuals moving abroad for work increases, demand for corporate relocation services has risen.
• In 2013, the number of lets to corporate tenants in New York rose by 21% compared to the previous year. The comparable figure for London and Hong Kong was 7% and 16% respectively.
• Corporate tenants are increasingly taking personal leases in order to save some of their housing budgets.
• Government statistics show that compared to New York and Hong Kong, London has a higher number of skilled workers (a key driver of prime rents).
• Singapore has seen a 21.2% rise in workers in the financial and insurance sectors since 2009.
• According to forecasts by the Centre of Economic and Business Research (CEBR), Hong Kong’s financial sector is expected to grow by 7.2% in 2014 and by over 5% per annum in the years until 2017.
Liam Bailey, Global Head of Residential Research at Knight Frank says, “The total number of employment visas for skilled workers issued in the UK, the US and Hong Kong increased by 12% in 2013, compared to the previous year. A 17% increase in the number of Tier 2 visas issued in the UK was the main driver behind the overall growth, backed up by a 12% increase in work-related visas issued in the US. In Hong Kong, the number of individuals moving for work in 2013 was broadly the same as the previous year.”
“As the number of individuals moving abroad for work increases, demand for corporate relocation services has risen. In 2013, the number of lets to corporate tenants in New York rose by 21% compared to the previous year. The comparable figure for London and Hong Kong was 7% and 16% respectively.”
“However, while demand for corporate accommodation is up, cost remains an issue with corporate budgets for housing generally lower than before the financial crisis. This is partly as a result of companies keeping a keen eye on costs, and partly as a result of a shift towards personal leases as individuals opt to make savings on their housing budgets.”
David Ji, Head of Research & Consultancy, Greater China at Knight Frank says, “Corporate employers continue to reduce both their cost and liability by providing cash allowances for employees to enter into personal rather than corporate leases, and significantly increased stamp duties for purchasers have impacted on sales, thereby encouraging potential vendors to let out.”